Source | OPINDIA : By
Everyone is talking of UPI payments and how it changes everything in the world of digital payments. It is being touted as the major driver that will take us to being a cashless economy, along with mobile wallets.
For most of us it remains that elusive genie that will make all our payment wishes come true IF ONLY we knew how to rub the lamp the right way. Welcome to OpIndia’s simple no BS guide to UPI, where we tell you how to get started with UPI in under 10 minutes.
So what is UPI?
UPI is short for Unified Payment Interface. It’s the netbanking transfer for the mobile first generation. Quick to setup, quick to transfer money to another account. No bank account number needed, no logging in, no waiting, and no IFSC code. All you need to know is a username (called VPA or Virtual Private Address) to send money to anyone within seconds.
Why was UPI needed?
Netbanking wasn’t as efficient and quick. Netbanking was made for the internet; to make it secure, the extra steps required made the whole process of transferring money cumbersome, even with IMPS. A Mobile first solution like UPI takes away a lot of friction as we will see. It’s available 24×7, including on holidays.
Say, you need to buy from your local shop or local supermarket. You don’t want to take note of their bank details, add and confirm them as beneficiary, and then log into your netbanking or mobile banking app each time you buy something, where you would need to wait for OTP and provide information like those grid numbers on the back of your debit card. That’s just too much of work when all you have bought is a box of chips and some cold drinks!
How it’s different from mobile wallets?
Mobile wallets are apps that hold your money. With a Wallet you add money from your bank account using net banking or bank cards. The UPI app transfers money from one bank account directly into other just like netbanking IMPS transfer, there is no need for 3rd part apps to hold the money anymore.
So will UPI kill mobile wallets?
Wallets provide an added layer of security and also have a lot of 3rd party integrations that make it easier to pay your bills and make payments at stores or cab services. For example, you can add money to PayTM wallet and use it to pay bills, recharge phone, shop their own marketplace or other online merchants and pay for your Uber rides. UPI apps and ecosystem will take some time to get there, but once it does the charm of wallet apps will certainly go down.